Occidental Petroleum Corp. outperformed the stock market in the week’s opening session, after billionaire Warren Buffett’s company bought nearly 2.14 million shares of the producer last week.
The US major closed at $59.21 on Monday, up 0.7 percent from the previous session. The S&P 500 gained just 0.12 percent, the tech-heavy Dow Jones Industrial Average gained 0.03 percent and the NYSE Composite gained 0.27 percent.
Occidental traded close to 11.63 million units on Monday, the highest since last week.
Berkshire Hathaway Inc. has increased its common units in Occidental to 224,129,192 after last week’s three-day purchase of about $122.1 million, according to a filing with the US Securities and Exchange Commission (SEC) on 27 of July The Buffett-led investor now owns more than 25 percent of Occidental’s common stock, according to the 891,745,187 shares outstanding the oil company disclosed in its quarterly filing.
Occidental had not dipped below $56 a unit last week. Its high from Monday to Wednesday, when Berkshire bought the last stake in Occidental, was $57.895.
Berkshire traded at $57.02 per share on Wednesday, $57.1694 on Tuesday and $57.0143 on Monday.
In addition to the common units, Berkshire also owns 91,964 preferred shares in Occidental.
But with $712 million in preferred stock payable at the end of the first quarter, Occidental has activated its option to buy back the preferred stake under a deal in which Berkshire committed $10 billion to help the acquisition Anadarko Petroleum Corp by Occidental for $55 billion in 2019.
Occidental’s available cash stood at $1.218 billion in March, while its liabilities stood at $7.44 billion. In a court case against Anadarko, Occidental could also assume $1.4 billion in federal taxes, $28 million in state taxes and $453 million in accrued interest as the former’s debt obligations were transferred to the new owner, according to the quarterly report of Occidental.
Occidental’s push to the stock market comes as oil and gas companies have begun announcing the timing of their second-quarter earnings reports. He will announce his performance from April to June on August 2, he said in a media notice on Thursday.
“The company is expected to report EPS [earnings per share] of $1.30, down 58.86% from the year-ago quarter,” Zacks said Monday. “Our most recent consensus estimate calls for quarterly revenue of $7.28 billion, down 32.19 % less than last year’s period.
“OXY’s [Occidental] Zacks Consensus Estimates for the full year call for earnings of $4.84 per share and revenue of $29.84 billion. These results would represent year-on-year changes of -48.24% and -19.57%, respectively.”
Occidental’s net income for the January-March quarter fell nearly fourfold to $1.263 billion from the corresponding period in 2022 as commodity prices fell. It collected $4.876 billion in net profits from January to March 2022, when energy prices soared after Russia’s invasion of Ukraine. Occidental posted its highest quarterly cash before working capital in the period at more than $3.3 billion.
But as oil and gas prices have fallen since peaking in the middle of last year, Occidental’s profits slowed despite output rising to 1.22 million barrels of oil equivalent per day (MMboed) from 1,079 Mboed in the first quarter of 2022.
It has increased its production projection for the whole year to 1,195 Mboed.
Occidental declared $0.18 dividend per share to common stakeholders for Q1 2023, up five cents from the previous quarter.
On the day it announced its first-quarter results, May 9, Occidental was trading at $58.96.
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